Vote For a Solid Investment Strategy
Election Day is just two weeks away, and as a citizen, you may feel the results will affect many aspects of life in this country. But as an investor, your situation probably won't change after the votes are counted. No matter who wins, the financial markets may show some politically driven volatility, but that often happens around elections, and it typically doesn't last long. But what about the longer term? How might changes in policy and new legislation affect your investment outlook?
Over the years, we have seen many adjustments in the tax rates of capital gains and stock dividends, and it is likely these rates will change again one day. This is why you should review your portfolio periodically to see if you want to make some adjustments.
It is possible that future legislation could affect specific industries, either positively or negatively. Moves like this could also influence the way you look at certain investments. However, if you have a diversified portfolio that conations a mix of stocks, bonds, and other securities, any actions affecting one particular industry probably will not cause you to significantly adjust your investment in other sectors.
While it may be a good idea to keep an eye open for things like tax rate changes or how new policies may affect different market segments, your main emphasis - in terms of your investment decisions - should remain on your goals and what you need to do to achieve them.
At least once each year, review your portfolio carefully to make sure your investments are aligned with your goals. Whether they are short-term, i.e. a new car, a long vacation, or long-term, i.e. college for your children, a shore home, or a comfortable retirement. Periodically, depending on what is happening in your life and the progress of your investment portfolio, you may need to evaluate your goals to ensure they are prioritized appropriately to help keep you on track toward achieving what’s most important to you.
Strategy tip: You’re the one electing to make these changes. No matter what happens in this or any other election, be sure to “vote” for the strategies that have the potential for a winning outcome.